In the Amazon states, the path to success for college graduates rarely goes through private companies. Unlike the rest of Brazil, where the private sector is the biggest employer, in the Amazon, the public sector absorbs most of the skilled workforce. This is the conclusion of a study entitled “As portas de entrada do emprego formal na Amazônia” [Gateways to Formal Employment in the Amazon] by the Amazônia 2030 project, a collective of Brazilian researchers aiming to develop a sustainable development plan for the region.

"According to the research, led by economists Gustavo Gonzaga and Vinícius de Sá, 67.4% of college-educated workers in the region are employed in the public sector. For comparison, in the rest of the country, this figure stands at 42.4%. The researchers note that several factors contribute to this scenario, highlighting a heavy reliance on the public sector to generate high-quality job opportunities.

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In order to conduct the research, Gonzaga and Sá analyzed the formal labor market's structure using data from the Relação Anual de Informações Sociais - Rais [Annual Social Information Report], compiled by the Ministério do Trabalho e Emprego - MTE [Ministry of Labor and Employment], with 2018 as the baseline year. The researchers aimed to understand where the higher-quality formal occupations are found within the Amazon Region, and how this regional landscape compares with the rest of Brazil.

"Besides the concentration of highly educated workers in public service, the research revealed a high degree of informality in the market: merely 18.7% of the region's population held formal employment in 2018, as opposed to 28.4% in the rest of the country. According to the specialists, the disparity is tied to the smaller footprint of the formal private sector in the Amazon.

Vinícius de Sá assesses that the private sector is less dynamic in the region. "In the Amazon, even more than in the rest of the country, the public sector sustains formal employment, with a significantly higher concentration of these jobs in that sector. Regionally, it is especially concentrated within state governments, primarily in administrative roles. Among public sector workers with a higher education degree in the Legal Amazon, 42.5% are tied to state governments, as opposed to 33.1% in the rest of Brazil," the economist points out.

Furthermore, nationwide, the public sector pays better than the formal private sector for the same position. ‘’This is what we call a wage premium. In the Amazon, this is even more pronounced: the public sector pays even more than it does in the rest of the country, compared to private jobs. Consequently, public sector positions are more attractive. This holds true for all levels of education, but is even stronger for those with a college degree,’’ Sá analyzes.

In the Amazon, the average salary for college-educated workers in the public sector is 60% higher than in the formal private sector: R$ 4,808 in the former compared to R$ 2,994 in the latter, based on 2018 figures. In the rest of Brazil, the wage gap is only 27.5%

From private to public

It was precisely the prospect of better pay, coupled with other factors, that led Physical Education professional Dennys Conceição to take a civil service exam. Currently a civil servant at the Federal Institute of Pará (IFPA), working specifically as a Physical Education professor, he enjoys better salary conditions and greater job security.

"Before joining the public sector, I worked in the private sector for a long time, mostly in gyms. It was a very important phase for my professional development, involving highly dynamic work. On the other hand, it was an exhausting routine, marked by instability and a lack of professional recognition, especially when it came to salary," he shares.

According to the professor, this reality motivated him to move to the public sector. "I had the opportunity to build a more stable career, especially in terms of salary, and also to broaden the impact of my work. I started dealing not only with physical exercise, but also with human development, sports, leisure, health, inclusion, and citizenship. In the private sector, results tended to be more immediate and individual. In the public sector, the outcome is more collective and social," Conceição states.

A less dynamic private sector

According to Vinícius de Sá, the private sector is less present and dynamic in the Amazon. "The dominance of the public sector occurs in the face of this private sector vacuum, both by offering few skilled positions and by providing jobs that pay less," he states. For the study's authors, the observed pattern suggests limitations in the formal private sector's ability to absorb skilled workers in the region.

For José Raimundo Trindade, a professor in the Graduate Program in Economics at the Federal University of Pará (UFPA), however, the data presented in the study are not an issue. ‘’I do not see the public sector acting as an "employer of last resort" as problematic. Public employment is a normal and important way to absorb a portion of the unemployed workforce, serving as an anti-cyclical factor against unemployment. It is normal to have such occupational distributions, considering the difficulties of establishing more industrialized economies, which are generally the most formalized in regions like the Amazon,’’ the professor says.

Leveling the playing field

For Trindade, balancing hiring between the public and private sectors involves several possible measures to be taken by both sides. ‘’First, there would need to be increasing economic incentives to establish a production structure that relies more heavily on higher-productivity industries and services, even within conventional manufacturing segments, such as the apparel and furniture sectors,’’ he states.

Furthermore, the professor suggests establishing a policy for more stable contracts. ‘’To achieve this, a "sectoral chamber" policy would be necessary, bringing together business leaders, the government, and workers to organize productive segments already established in the local economy, such as the mining sector, commerce, services, and public concessions like electricity distribution. It would also be necessary to organize certain segments, such as mineral processing; the use of biodiversity in the pharmaceutical and cosmetics industries; and the industrial verticalization of bioeconomy supply chains, encouraging the establishment of factories within the state itself,’’ the economist concludes.

Finally, Trindade highlights the importance of reducing informality in the labor market, which, in the North region, affects more than half of the economically active population, accounting for 55.7% of workers, compared to 38.8% in the rest of Brazil, according to 2022 data from the Brazilian Institute of Geography and Statistics (IBGE).

“It is necessary to establish formalization and productive organization policies in segments that are completely informal today. For instance, organizing informal segments using the MEI (Individual Microentrepreneur) system, offering possibilities for coordination among them through cooperative or associative forms,” he states.

INSTITUTIONAL PARTNERSHIP
The production of Liberal Amazon is one of the initiatives of the Technical Cooperation Agreement between the Liberal Group and the Federal University of Pará. The articles involving research from UFPA are revised by professionals from the academy. The translation of the content is also provided by the agreement, through the research project ET-Multi: Translation Studies: multifaces and multisemiotics.